Citation: Grizonic v Suttor [2008] NSWSC 900
Court: Supreme Court of New South Wales, Equity Division (Expedition List)
Date: 22 February 2008
Judge(s): Brereton J
Background
The plaintiff and the first defendant were former partners in a restaurant business. Following the breakdown of the partnership, the plaintiff commenced proceedings in the Equity Division in 2003 seeking orders for dissolution of the partnership and the taking of accounts. A separate claim was also on foot in the Common Law Division, framed as a damages action alleging that the first defendant had misused partnership funds and property for her own benefit and that of related parties.
The common law claim arose from the same factual matrix as the equity proceedings. Both concerned the conduct of the partners in relation to partnership assets and the financial affairs of the business.
Two interrelated applications came before Brereton J on the same day. The plaintiff sought to have the common law proceedings transferred to the Equity Division and heard together with the equity proceedings. The defendants, for their part, applied to have the equity proceedings dismissed for want of prosecution.
Legal Issues
- Whether the common law damages proceedings should be transferred to the Equity Division and consolidated with the equity partnership accounting proceedings
- Whether the equity proceedings (the partnership accounting proceedings) should be dismissed for want of prosecution by the plaintiff
Decision
On the transfer application, Brereton J found that the common law claim, although pleaded as a damages action, was in substance a claim that the defendants had breached duties owed to the partnership and that the appropriate remedy was an account to the partnership rather than damages. The issues raised in those proceedings were, in the judge's words, "inextricably interwoven" with the taking of the partnership accounts already under way in the equity proceedings. It was therefore manifestly convenient and appropriate for both matters to be dealt with together.
Brereton J obtained the consent of the Chief Judge in Common Law to sit at common law for the purpose of ordering the transfer, consistent with standard practice. The common law proceedings were transferred to the Equity Division to be heard together with the equity proceedings, with evidence in one proceeding to be evidence in the other.
On the dismissal application, the defendants complained of a failure to prosecute primarily from mid-2007 onwards. Brereton J placed that period of delay in its broader context: the proceedings had been running since late 2003 and had a complex procedural history. Critically, a four-day hearing that had been set down before Rein AJ in July 2007 was vacated because the defendants themselves served fresh evidence on the first day of the hearing, prompting a successful adjournment application by the plaintiff.
The court also observed that neither party had complied with the directions made after the vacation of that hearing, including obligations to prepare agreed bundles and serve lists of affidavits. The defendants' primary complaint about non-prosecution amounted to the plaintiff's failure to respond to correspondence about a proposed mediator. Brereton J found this wholly insufficient to support dismissal for want of prosecution, particularly given the defendants' own non-compliance with court directions. The application was refused.
Orders Made
- Proceedings 20002/05 transferred from the Common Law Division to the Equity Division
- Proceedings 20002/05 to be heard together with proceedings 6141/03
- Evidence in one proceeding to be evidence in the other
- Application to dismiss proceedings 6141/03 for want of prosecution refused
Key Takeaways
- Where a damages claim is, in substance, a claim for breach of duty to a partnership requiring an accounting remedy, its issues may be so closely interwoven with equity partnership proceedings that transfer to the Equity Division is appropriate.
- A want-of-prosecution application will be assessed in the full context of the proceeding's history, not merely by reference to a recent period of inactivity.
- Dismissal for want of prosecution is unlikely to succeed where the applicant has itself failed to comply with court directions and has contributed to delays, including the vacation of a scheduled hearing.
- The court's finding that Ms Suttor had never complied with the August 2004 direction to produce a chronological account of all partnership receipts and payments (as required by UCPR r 46.5 and Equity Division practice) featured prominently in the assessment of which party bore greater responsibility for the state of the proceedings.
- Correspondence about a proposed mediator, without more, does not constitute a sufficient basis for a dismissal order in complex, long-running proceedings.
Legislation and Cases Referenced
Legislation:
- Uniform Civil Procedure Rules (NSW), r 46.5
Cases cited: No cases were cited in the judgment.